The Insurance Regulatory and Development Authority of India (IRDAI) has issued a directive requiring all life and health insurance providers to introduce the ‘Bima-ASBA’ facility from March 1, 2025. This initiative aims to simplify premium payments by allowing policyholders to block their premium amount in their bank account, which will be deducted only upon policy approval.
Premium Payment Process to Change
Under the updated guidelines, insurance companies can collect premiums only after informing customers that their insurance proposal has been accepted. To streamline this process, insurers can leverage the UPI One-Time Mandate (UPI-OTM) system, enabling policyholders to authorize future transactions.
What is Bima-ASBA?
Bima-ASBA, short for Application Supported by Blocked Amount for Insurance, is a payment system that allows policyholders to block a specific amount in their bank account for premium payments. The funds remain in the policyholder’s account and are only debited upon policy issuance. This system mirrors the IPO application process in the stock market, where funds are blocked and deducted only when shares are allotted.
The National Payments Corporation of India (NPCI) will periodically determine the transaction limits for the Bima-ASBA facility.
Mandatory for Life and Health Insurance Policies
All life and health insurance companies must offer the Bima-ASBA facility starting March 1, 2025. This move is expected to ensure transparency, reduce payment issues, and streamline the policy issuance process.
Gig Workers to Receive Health Insurance Benefits by June
In a separate development, the Union Ministry of Labour and Employment is set to roll out health insurance benefits for gig workers by June 2025. Temporary workers engaged through e-commerce platforms and digital services will soon gain coverage under the Pradhan Mantri Jan Arogya Yojana (PMJAY).
e-Shram Portal Registration for Benefits
Gig workers registered on the e-Shram portal will be issued health cards, enabling them to access medical services under the PMJAY scheme. This initiative aims to extend healthcare security to a segment often excluded from traditional employee benefits.
EPFO Pension Benefits Likely for Gig Workers
In addition to health insurance, the Ministry of Labour is working on a proposal to extend Employees’ Provident Fund Organization (EPFO) pension benefits to gig workers. An internal committee has drafted a proposal, which is expected to be submitted for Cabinet approval soon.
The government plans to implement this scheme by the end of 2025 or even earlier, ensuring social security and retirement benefits for gig economy workers.